Modest Recovery Eyed For Malaysia Stock Market

3/26/2012 8:00 PM ET

The Malaysia stock market gave up just a pair of points on Monday - but that was enough to end the five-day winning streak in which it had risen more than a dozen points or 0.8 percent. The Kuala Lumpur Composite Index finished just above the 1,580-point plateau, and now investors are looking for a quick rebound when the market opens on Tuesday.

The global forecast for the Asian markets is broadly positive following upbeat commentary from Federal Reserve Chairman Ben Bernanke - who noted that the U.S. unemployment rate has declined faster than the Fed predicted. Capping the upside, a report from the National Association of Realtors showed an unexpected drop in pending home sales in February. The European and U.S. markets finished firmly higher, and the Asian bourses are expected to open in similar fashion.

The KLCI finished slightly lower on Monday as losses from the industrials and plantations were mitigated by support from the financial sector.

For the day, the index eased 2.85 points or 0.18 percent to finish at the daily low of 1,582.98 after peaking at 1,588.06. Volume was 1.497 billion shares worth 1.334 billion ringgit. There were 519 decliners and 260 gainers, with 307 stocks finishing unchanged.

Among the actives, CIMB Group, Petronas Chemicals, Focus Dynamics Technologies, AT Systematization and Metronic Global all finished lower, while Sime Darby was unchanged and Maybank and Supercomet Technologies moved higher.

The lead from Wall Street is firmly upbeat as stocks moved sharply higher on Monday following encouraging remarks by Federal Reserve Chairman Ben Bernanke. The rally followed a mixed performance last week.

The strong upward move followed a speech by Bernanke, who noted that the U.S. unemployment rate has declined faster than the Fed predicted but cautioned that the jobs market remains far from normal.

While the Fed chief warned that cyclical problems could turn into structural weakness in the U.S. jobs market without a more robust recovery, he assured that the Fed's zero-interest rate policy and other support measures will help reduce unemployment over time by promoting economic growth.

Traders largely shrugged off a report from the National Association of Realtors showing an unexpected drop in pending home sales in February. NAR said its pending home sales index fell by 0.5 percent to 96.5 in February after rising by 2.0 percent to 97.0 in January. Economists had expected an increase by 1.0 percent after it had reached its highest level since April 2010.

Among individual stocks, shares of Lions Gate Entertainment (LGF) jumped 4.5 percent after the company's latest movie "The Hunger Games" topped the box office with $155 million in its opening weekend, a record for a March release.

The major averages closed firmly in positive territory, at or near their best levels of the day. The Dow jumped 160.90 points or 1.2 percent to finish at 13,241.63, while the NASDAQ soared 54.65 points or 1.8 percent to end at 3,122.57 and the S&P 500 surged 19.40 points or 1.4 percent to 1,416.51. The NASDAQ and the S&P 500 hit fresh multi-year closing highs, while the Dow closed just shy of the four-year closing high it set earlier this month.